Hydrology Project-II

Funded by World Bank

A presentation byController of Accounts

Union Ministry of water resources

Strategic Context & Rationale

Water Resources Management : key issues Floods, drought, scarcity, quality

Calls for comprehensive planning, paradigm shift from isolated to comprehensive planning and management

in a river basin context.

Requires sound Hydrological Information System

Strategic Context & Rationale

HIS: Integrated water information system

Hydrological and meteorological data

reliable, comprehensive, timely

Scientific, hydrological, meteorological observation networks

Data processing and storage facilities

Reliable data communication arrangements

Trained manpower for HIS operations

Strategic Context & Rationale HP-I (‘95-03; Rs 605.28 Cr) helped create

Associated improved facilities for HIS Standardized procedure and inter-agency protocol

for data collection, collation, processing and exchange

A movement for improved water resource management

HP-I failed to overcome ‘Rigidities of insular culture’ Data ownership and information sharing issues

HIS still deficient in Geographic coverage Analytical usage, as envisaged

Organization National Level Steering Committee (NLSC)

Secretary- MOWR (chair), central agencies chiefs, SLSC chiefs, states’ secretaries

Three HIS Management Groups (HISMGs)1. Data use and Dissemination (DD)2. Institutional Strengthening/ Training (IS)3. Technical (T)

HIS Coordination Secretariat, assisted by Management consultants Technical consultants Other national consultants

Organization

13 Participating States: 9 old : Andhra Pradesh, Chattisgarh, Gujarat,

Maharashtra, Karnataka, Kerala, Madhya Pradesh,,

Orissa, Tamil Nadu.

4 new : Himachal Pradesh, Goa, Pondicherry and Punjab

8 Central Agencies: MoWR, CWC, CGWB, NIH, CWPRS, IMD, CPCB, BBMB.

Organization 13 Participating States:

9 old : Andhra Pradesh,

Chattisgarh, Gujarat,

Maharashtra, Karnataka,

Kerala, Madhya Pradesh,,

Orissa, Tamil Nadu.

4 new : Himachal Pradesh,

Goa, Pondicherry and Punjab

8 Central Agencies: MoWR, CWC, CGWB, NIH,

CWPRS, IMD, CPCB, BBMB.

Project Design & Costs

A w aren ess ra is in gkn ow led g e sh arin g .

Im p lem en ta tion su p p ort.

In s titu t ion a l s tren g th en in g(4 9 .3 8 m U S D )

(36% )

H yd ro log ica l D es ig n A id sD ec is ion S u p p ort S ys tem s

P u rp ose-D riven S tu d ies .

V ertica lE xten s ion(5 8 .9 5 m U S D )

(44% )

D ata co llec tionD ata p rocess in g

Tra in in g

H orizon ta l E xp an s ion(2 6 .7 2 m U S D )

(20% )

H P -II

Project Design & Costs (mn US$)

6.88

28.31

58.36

79.37

94.12

102.44 105.51

Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7

US$mIBRD :105.51 Government :29.54

IBRD Disbursement (US$ in mn)

Project Design & Costs (Cr Rs)

Project cost 631.83

Base Cost525.59

Central220.92(34.96%)

States304.67(48.22%)

Contingencies106.54(16.86%)

Physical: 34.99

Financial: 71.55

Project Design & Costs

Existing States35%

New States23%

Central Agencies42%

States58%

Project Design & Costs

38.9

6346.35

30.63 23.96 18.06

10.08

29.4

32.07

25.36

14.4211

16.32

40.24

42.31

36.94

25.8

19.9

Year-1 Year-2 Year-3 Year-4 Year-5 Year-6

Central New States Existing States

Central Agencies:Cost Break-up

BBMB10%

CGWB11%

CWC10%

CPCB7%

CWPRS15%

IMD12%

NIH18%

MoWR-CS17%

HP-I vs. HP-II

Goods31%

Consultancy19%

Recurrent Cost27%

HP-I, Recurrent Cost, 31%

HP-I, Civil Works, 25%

HP-I, Goods, 31%

HP-I, Consultancy, 11%

HP-I, Training , 2%

Civil Works15%

Training 8%

Financial Management Dedicated Financial Management for HP-II under IFD

Financial Management Manual prepared by IFD (CA)

to standardize policies, procedures, reporting formats

Central coordination with all implementing agencies

Central coordination for all audit matters

Web enabled financial management software

to be developed, in two states as pilot

Financial Monitoring

Why Financial Monitoring ? Scarcity of resources - The resources are limited and tend to

decrease with the consumption, so FM is required;

Agency role – It is of paramount importance to have a close

watch over the financial health of the project to keep it in right

track;

Value for money – The wastage of Funds accorded in the

Project ceases to be outflow in absence of FM, hence it is

required

Objectives

Efficient use of available resources

Compliance of applicable laws and regulations

Utilization of funds for the purpose for which it is provided

Establishment of Accountability and responsibility

To flag the probable time and cost escalation.

Enable decision making to ensure timely completion of project

Features

Budgeting process

Funds flow mechanism

Accounting policies

Maintenance of books of accounts

Documentation

Estimates Executive and Finance

Budgeting Finance and accounts

Execution Executive, Finance and Accounts

Review Executive Finance and Accounts

Role of Various Agencies

Thrust Area Execution on the ground

Directed towards output to be achieved

Using given resources

Optimization of output

Monitoring Agencies

Dedicated Finance Desk HISCS in the Union Ministry of Water Resources

Accounts Branch attached to State HIS Coordination Committee.

Basis : Information on monthly basis From all units and IAs in the formats prescribed

Project financial statements A summary of funds

received by the implementing agency showing the World Bank and counterpart funds

separately A summary of expenditures

shown under the main project components / sub-components / disbursement categories

both for the current fiscal year and accumulated to date; and

PFS : Attachments

Schedule listing individual withdrawal applications

by specific reference number, date, period & amount.

Reconciliation between expenditure incurred during the financial year

Reconciliation statement between the amounts claimed and expenditure incurred.

IT orientation

All the centre's of HP to be computerized & fully

connected by a network, All reports should be electronically transmitted

Enhance the current system of recording and reporting

expenditure

Software will be web-enabled and will link the

state finance unit with the Finance wing of MOWR

Internal Audit

Why Internal Audit ? Internal auditing is an objective, independent,

assurance activity Designed to –

add value improve an organization's operations.

It helps an organization accomplish its objectives by bringing a systematic, disciplined approach

Evaluate & improve effectiveness of risk management, control & governance processes.

Mandate Internal audit of HP-II is institutional responsibility

of CA – MoWR Three responsibility dimensions:

direct internal audit responsibility for MoWR agencies dealing with HP-II funds;

constructive responsibility for appropriateness of internal controls and internal audit of other central and inter-state agencies;

constructive responsibility for appropriateness of internal controls and internal audit of states.

Mandate Financial Audit

Audit of budgetary & financial systems with compliance tests

assessment of effectiveness of accounting reporting system

Performance Audit: ‘Value for money’ audit covers the extent to which objectives & programme

of the agency has been achieved It may also cover specific analysis of staff resources

Audit Points

How far the physical & financial targets have been

achieved

How far social & economic objectives have been realized

Whether the operations are conducted economically

Whether there are any case of losses, overpayment,

extravagance, overstaffing delays in completion of

projects, infructuous expenditure

Scope & Role

Protective Role

Compliance with laid down procedures

Asset Projection Information accuracy Assisting fraud detection

Constructive Role

Suggestions for improvement

Reduced costs Process change Increase in revenue

Management Letter Ineligible expenditures identified

Degree of the compliance with financial covenants of the

financing agreements

Matters with significant impact on the implementation of

the project

Any other matters that the auditors consider pertinent.

Methods for improving weak controls or for creating

them where there are none

Management Letter

An assessment of compliance with provisions of the

financing agreements (IBRD Loan Agreement; Project

Agreements)

particularly those relating to financial matters would be

prepared.

That funds have been used with due regard to economy,

efficiency and effectiveness and for the purposes they

were provided

Thank You